The future of hospital & nursing and residential care foodservice is bright, with foodservice hospital & nursing and residential care expenditures reaching $34.0 billion in 2010, a 3.7% increase from 2009, according to Packaged Facts’ Trends in U.S. Hospital, Nursing Home and Residential Facility Foodservice. Underpinning the largest and fastest-growing sector of the U.S. economy, hospital & nursing and residential care foodservice programs can count on serving an increasing pool of patients, employees, and visitors. For foodservice operators, a shrinking pool of mouths to feed is simply not on the menu, which informs much of our positive outlook.

1.
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Trends in U.S. Hospital, Nursing Home and Residential Facility
Foodservice
February 1, 2011
The future of hospital & nursing and residential care foodservice is bright, with
foodservice hospital & nursing and residential care expenditures reaching $34.0 billion
in 2010, a 3.7% increase from 2009, according to Packaged Facts’ Trends in U.S.
Hospital, Nursing Home and Residential Facility Foodservice. Underpinning the largest
and fastest-growing sector of the U.S. economy, hospital & nursing and residential care
foodservice programs can count on serving an increasing pool of patients, employees,
and visitors. For foodservice operators, a shrinking pool of mouths to feed is simply not
on the menu, which informs much of our positive outlook.
However, uncertainty looms in the form of government healthcare spending; the
enactment of the Patient Projection and Affordable Care Act; and addressing state and
federal budget shortfalls. We view contract management companies as potential
winners of a budget crunch.
• Among the conclusions drawn in the report, foodservice programs should not
only emphasize women’s nutritional and other health-driven considerations, but
also be informed about the different ways women view food generally, whether at
home or at restaurants. This need is even more pronounced at assisted living
facilities.
• The report also concludes that a wealth of opportunity exists to tailor foodservice
programs around family caregivers. Under these circumstances, a person’s
relationship with food may understandably change, and foodservice plays an
important role. This explains why those dealing with illness are more apt to use a
variety of foodservice types.
• And while the presence of restaurant brands can provide hospitals with a health
dilemma, we view hospital-based restaurant establishments as a component of
foodservice consumers expect. Restaurant brands that forcefully play the health
card can offer a win-win proposition for hospital foodservice.
• The report also identifies the following trends as “primary” with positive
momentum: Room service and individualized patient care; customer service;
wellness and nutrition; variety and culinary exploration; sustainability and green
initiatives; and the need for speed.

2. • In a unique approach to quantifying market opportunity, the report assesses
“meal opportunity” for inpatient and outpatient hospital, assisted living, and
hospital employee settings.
This Packaged Facts report provides insight and analysis on hospital and nursing and
residential facility foodservice trends. We map key trends and policies shaping sales
growth and potential, and provide in-depth profiles of hospital foodservice programs and
hospital and nursing home foodservice contractors.
Key coverage includes:
“Share of stomach” analysis
“Share of stomach” hospital and nursing and residential facility sales analysis, which
includes 2005-2012 expenditures trends for the hospital and nursing and residential
facility segments, with forecasts for 2010, 2011, and 2012.
Consumer restaurant tracking
Via our proprietary Consumer Spend Tracker, Packaged Facts places consumers’
hospital foodservice use within context. This includes directional analysis on recent and
intended consumer behavior related to food & foodservice usage; foodservice usage
and usage frequency by foodservice category, including limited-service, full-service,
snack and beverage, bars and taverns, and institutional foodservice; and targeted
analysis of hospital foodservice and associated user food, diet and health attitudes.
In-depth trend analysis and market participant analysis
Report coverage also includes:
• Targeted analysis of hospital foodservice users and associated food, diet and
health attitudes.
• Trends related to the presence and growth of restaurant-branded hospital
foodservice, supported by analysis of leading hospital foodservice programs.
• Trends related to hospital foodservice, including but not limited to room service
and individualized patient care, customer service, wellness and nutrition, variety
and culinary exploration, sustainability and green initiatives, the need for speed.
We also analyze the following market participants:
• Three leading hospital foodservice programs, with a focus on foodservice trends,
initiatives, and metrics.
• Hospital foodservice segments of three leading foodservice contractors
(Aramark, Sodexo, and the Compass Group) and one nursing home foodservice
contractor (Healthcare Services Group, Inc.).

3. • Share of Stomach: Sales Analysis
In this section, Packaged Facts provides market size and forecast for the hospital
& nursing and residential care foodservice market, which we assess according to
hospital and residential care foodservice segments.
• Insight Capsule
-- The future of hospital & nursing and
residential care foodservice is bright.
Packaged Facts estimates that foodservice
hospital & nursing and residential care
expenditures will reach $34.0 billion in 2010, a
3.7% increase from 2009. Going forward, we
believe that sales will rise approximately 4.7%
in 2011 and 5.3% in 2012, driven primarily by
strong healthcare care industry growth.
• -- Underpinning the largest and fastest-growing sector of the U.S. economy,
hospital & nursing and residential care foodservice programs can count on
serving an increasing pool of patients, employees, and visitors. For foodservice
operators, a shrinking pool of mouths to feed is simply not on the menu, which
informs much of our positive outlook.
• Hospital Users
Some 9.6% of age 18+ respondents to Packaged Facts’ October 2010
proprietary survey agreed with the statement, “I have been to a hospital in the
past month because of illness or because of illness of someone I know.”
• The ambit of this question covers a lot of ground: respondents who answered
affirmatively could have been inpatients or outpatients receiving treatment or
have been visiting/accompanying inpatients or outpatients. The common nexus,
however, involves dealing with illness.
• Bottom line: dealing with illness correlates with foodservice use
• Stepping back from statistics, we need only try to step into the shoes of someone
dealing with illness, either their own or that of someone dear to them. The
emotional and physical toll can be tremendous. Schedules already at the bursting
point are pushed beyond reasonable limits; order and calm are sacrificed in the
face of fear of loss; animal instincts are aroused in pursuit of wellbeing and
emotional security.
• A strong McDonald’s skew!
• Researchers found that the presence of a McDonald’s restaurant in a children’s
hospital significantly increased the purchase of fast food. In fact, visitors to a
hospital with an on-site McDonald’s were four times more likely to purchase fast
food on the day of the survey than visitors to hospitals with no on-site fast-food
restaurant.
• Overall, 42% of respondents bought fast food on the day of the survey, and
McDonald’s was chosen by 82% of fast food purchasers.

4. Table of Contents
Chapter 1: Executive Summary
Scope and Methodology
Scope
Methodology
Consumer survey methodology
Industry Framework and Drivers
Insight Capsule
Fast Facts
Foodservice Usage & Outlook Tracker
Insight Capsule
Fast Facts
Share of Stomach: Sales Analysis
Insight Capsule
Fast Facts
Hospitals & Restaurant Brands
Insight Capsule
Fast Facts
Hospital Foodservice Trends
Insight Capsule
Fast Facts
Hospital Program Analysis
Cleveland Clinic
UCLA Medical Center
University of Washington Medical Center
Hospital Foodservice Management
Self-management versus contract management

5. A loyal—and growing—following?
The tighter the budget becomes, the more outsourcing becomes attractive
Bottom line: contracts grow but overall revenue flattens
Aramark
North America Health Care Sector
Strategy: partnering in patient care, custom menus, branding
Partnering in patient care
Custom menus
Branding
Sodexo Inc
North American Health Care
Health care foodservice strategy: high-value custom offerings, nutrition services
High-value custom offerings
Nutrition Services
Compass Group PLC
Compass Group North America (CGNA)
North America Health Care Sector
Strategy
Personalized Care
Retail Branding
Retail Strategy
Healthcare Services Group, Inc.
Sales analysis
Foodservice strategy
Chapter 2: Industry Framework and Drivers
Overview
A massive captive foodservice audience

6. Employee meal opportunity: $1 billion
53,000 locations and counting
Table 2-1: Hospital, Nursing and Residential Facility Establishments, 2005-2009
6.4% of U.S. workforce, with higher than average earning power
Table 2-2: Hospital, Nursing and Residential Facility Employee Earning Power, 2009
Healthcare employment trends assure more mouths for foodservice to feed
An employment behemoth that is only getting bigger
Aging population to drive employment need—and patient foodservice need
Table 2-3: Population Projection, Age 65+ and Age 85+, 2010-2025
Nursing and residential care job growth to be twice the rate of hospital
employment
Table 2-4: Healthcare Employment Projections, 2008-2018
Hospitals
Overview and hospital types
General hospitals
Special hospitals
Rehabilitation and chronic disease hospitals
Psychiatric hospitals
Community hospitals
Almost a million beds and 40 million admissions
Table 2-5: U.S. Hospitals, by Type and Operational Characteristics, 2009
General hospitals predominate
Table 2-6: Hospital Facility Establishments, by Type, 2005-2009
Average length of stay stable over time, with demographic variations
Table 2-7: Average Length of Stay Trends, Gender Analysis, by Age
Hospital patient meal opportunity: millions and millions served
Table 2-8: Inpatient Meal Opportunity, Community Hospitals, 2000-2008
Patient illnesses and treatments strongly determine foodservice approach

7. Male and female admission rationales significantly different
Table 2-9: Surgical Procedures, Type of Procedure, by Sex
Table 2-10: Hospital Earning Power & Foodservice Labor Expense,
by Hospital Type, 2009
Nursing and Residential Care Facilities
A more labor-intensive environment calling for greater degree of salary allocation
Assisted living facilities
Table 2-11: Nursing and Residential Care Facility Earning Power
& Foodservice Labor Expense, by Type, 2009
Residential care licensing types evolving toward “assisted living” terminology
State licensing and regulatory approaches
Institutional model
Housing and services model
Service model
Umbrella model
Multiple levels
Services, demographics and fees
McDonald’s watch out: assisted living meal opportunity may be a billion a year
Inpatient meal opportunity outstrips that of hospitals
Service assessment
Room and board rates
An overwhelmingly female demographic
Table 2-12: Assisting Living Facilities: Key Demographics, 2009
Nursing homes
Table 2-13: Nursing Facilities: Key Operational Statistics, 2010
A higher degree of assistance required
Less than half of nursing home residents can eat independently

8. Table 2-14: Nursing Facilities: Patient Characteristics, 2010
Mental health facilities
Chapter 3: Foodservice Usage & Outlook Tracker
Packaged Facts’ Consumer Restaurant Tracker
Table 3-1: Foodservice Categories and Types
February 2010 food retail momentum continues through October 2010
Graph 3-1: Consumer Restaurant Tracker: Current Behavior: A Top Line View
Looking ahead: Consumers more likely to save & spend on groceries than spend
at restaurants
Intended behavior portends full-service restaurant pullback
Graph 3-2: Consumer Restaurant Tracker: Next 3 Months: A Top Line View
Saving money remains at the forefront; intention to save spreads
Graph : Consumer Restaurant Tracker: Future Behavior: Saving Money
Foodservice usage and usage frequency
Overview
Limited-service restaurants
Full-service restaurants
Snack and beverage concepts
Institutional foodservice
Table 3-2: Foodservice Establishment Usage and Mean Use, 2010
Foodservice and institutional foodservice usage analysis
Note on reading charts
Foodservice category use
Age
Graph 3-4: Foodservice Usage in Last Month, by Foodservice Category, Age 2010
HH income
Graph 3-5: Foodservice Usage in Last Month, by Foodservice Category, HH Income,
2010

9. Work status
Graph 3-6: Foodservice Usage in Last Month, by Foodservice Category, Work Status,
2010
Population density
Graph 3-7: Foodservice Usage in Last Month, by Foodservice Category, Population
Density, 2010
Institutional foodservice category use
Gender
Graph 3-8: Institutional Foodservice Use in Last Month, by Foodservice Category,
Gender, 2010
Age
Graph 3-9: Institutional Foodservice Use in Last Month, by Foodservice Category, Age,
2010
HH income
Graph 3-10: Institutional Foodservice Use in Last Month, by Foodservice Category, HH
Income, 2010
Work status
Graph 3-11: Institutional Foodservice Use in Last Month, by Foodservice Category,
Work Status, 2010
Population density
Graph 3-12: Institutional Foodservice Use in Last Month, by Foodservice Category,
Population Density, 2010
Hospital Users
Bottom line: dealing with illness correlates with foodservice use
Relationship with food changes; foodservice plays important role
Table 3-3: Hospital Users, Foodservice Use by Type, 2010
Caregiver restaurant usage & food, health and diet attitudes
Caregiving pressures may draw caregivers to full-service restaurants
Table 3-4: Caregiver Restaurant Usage Frequency, Family and Fast Food Restaurants,
2010
But kids also play a role

10. Caregiving adds a layer of restaurant use
Table 3-5: Caregiver Restaurant Usage Frequency, Family and Fast Food Restaurants,
Kids, 2010
Caregiving an added burden for parents
Graph 3-13: Caregivers, Influence of Children
And for grown children
Graph 3-14: Caregivers, Influence of Age
Hectic life of the caregiver reflected in food, health and diet attitudes
Table 3-6: Caregiver Food, Health and Diet Attitudes, Strength of Agreement, 2010
Chapter 4: Share of Stomach: Sales Analysis
Summary analysis
The future of hospital & nursing and residential care foodservice is bright
With significant caveats
Contract management may win share
Cost cutting versus revenue generation
Packaged Facts hospital& nursing and residential care market size and forecast
Graph 4-1: Hospital & Nursing and Residential Care Foodservice Sales, 2005-2012
National Restaurant Association market size and forecast
Graph 4-2: Hospital & Nursing Home Foodservice Sales, Contract Management Share,
2001-2009
U.S. Economic Census foodservice contractor market size
Table 4-1: Foodservice Contractor Revenue, Hospital & Nursing Home Share, 2007
Foodservice contract management contracts grow while revenue flattens
Table 4-2: Foodservice Contract Management Performance, 2008-2009
Table 4-3: Foodservice Contract Management, Hospitals Contracts, 2008-2009
Growth factors
Industry growth to drive foodservice increase
Hospital spending grew 5.9% in 2009; solid growth ahead

11. Nursing home care expenditure growth rate to increase
Graph 4-3: Hospital and Nursing Home Care Expenditures
& Projected Expenditures, 2005- 2019
Buoyed by government funding
Table 4-4: Healthcare Expenditure Receipts, By Source
Graph 4-4: Hospital and Nursing Home Care Expenditures & Projected Expenditures,
Public Funding, 2009-2014
Serving an aging population
Table 4-5: Population Projection, Age 65+ and Age 85+, 2010-2025
Table 4-6: Hospital, Nursing and Residential Facility Employee Earning Power, 2009
Key hospital performance measure undervalues foodservice
HCAHPS survey leaves out foodservice!
So what?
Meal opportunity analysis
Inpatient hospital foodservice meal opportunity stagnates through decade
Table 4-7: Inpatient Meal Opportunity, Community Hospitals, 2000-2008
Meal opportunity highest among female and older patients
Table 4-8: Inpatient Meal Opportunity, Gender and Age Analysis
Outpatient hospital meal opportunity outstripped inpatient opportunity
Table 4-9: Outpatient Meal Opportunity,
Community Hospitals, 2000-2008
Pricing and expenditures
Average hospital check on the rise
John H. Stroger Jr. Hospital of Cook County: foodservice expense primer
Table 4-10: John H. Stroger, Jr. Hospital Of Cook County,
2009 Foodservice Expense Analysis
Chapter 5: Hospitals & Restaurant Brands
Restaurant brands at hospitals: a tug-of-war pitting health against revenue

12. The dilemma
A violation of trust?
The bottom line: healthy brands have room to grow
Restaurant brand penetration above 40%
Table 5-1: Frequency of Brand Name Fast Food (BNFF)
Franchises at 233 Academically Affiliated Hospitals
Table 5-2: Food Outlet Analysis, U.S. Children’s Hospitals
Barometer for fast food penetration at children’s hospitals set at 30%
1 in 4 children’s hospitals with fast food franchises
Fast food presence influences food purchases and perceptions
Does food purchasing at a hospital with a McDonald’s differ from those without
one?
Study parameters
A strong McDonald’s skew!
Table 5-3: Children’s Hospital Study, Fast Food and McDonald’s Purchases
Why did they pick McDonald’s?
Convenient location and child preference
Table 5-4: Children’s Hospital Study, McDonald’s Purchase Rationales
The Subway alternative
Where are they now?
30,000 McDonald’s in the U.S. but only 32 in hospitals
Mayo Clinic: “Live Well” and eat Zpizza
Cleveland Clinic: McDonald’s on the way out; GO! Foods on the way in
Ten-year battle with McDonald's coming to a close
Fruit and walnut salad first offered here
GO! foods a healthy option
Brands galore
UCLA Medical Center

13. Johns Hopkins Hospital
University of Alabama Hospital
Other hospitals
University of Pittsburgh's Magee-Women's Hospital's
Children's Hospital of Philadelphia
Massachusetts General Hospital
University of Washington Medical Center
Franchise cost analysis
Local, independent brands; revenue-sharing
Healthier restaurant profiles a better sell
Contracts that address degree of risk-reward
Chapter 6: Hospital Foodservice Trends
Hospital Foodservice Trends
Overview: trend prevalence and momentum
Primary trends
Room service and individualized patient care
Customer service
Wellness and nutrition
Variety and culinary exploration
Sustainability and green initiatives
The need for speed
Secondary trends
Visual stimulation
Catering
Room service and individualized patient care
Personal dining care: examples
Variation in services

14. Customer service!
University of Washington Medical Centeruse of feedback
The need for speed
Examples
Food safety
Examples
Minimizing disease transmission
Examples
Wellness and nutrition: the obvious is actually not obvious
Pros to healthier hospital foodservice
Cons to healthier hospital foodservice
Wellness and nutrition initiatives in the upswing
Menu labeling catching on
Variety
Examples
Culinary exploration
Examples
Chefs on board
Special discounts and incentives to dine in the hospital
Would you make a trip to the hospital just to eat the food?
Green initiatives
Examples
Visual stimulation
Driven by restaurant competition
Food as visual stimulation
Catering
Integrated technological systems

15. Building staff collaboration, knowledge, and morale
Chapter 7: Hospital Program Analysis
Cleveland Clinic
Overview
Patient profile
Table 7-1: Cleveland Clinic, Demographic Data, Treated Diabetics
Foodservice programs and services
Multitude of dining options
Ousting chains
Pizza Hut leaves; McDonald's stays
Management split between Sodexo and AVI Food Systems
Room service an extra: get a Founders Suite
Foodservice growth trends
Emerging trends
2009-10 foodservice initiatives
Future initiatives
UCLA Medical Center
Overview
Demographics
Foodservice programs and services
Signature Dining, anyone?
Customized service
The backend meets the front end: how it works
A diverse menu to meet needs of a diverse population
Café Med: serving 1.2 million customers a year
Offerings and sales trends
Catering at 10 years of age

16. Foodservice growth trends
2009-10 foodservice initiatives
Foodservice philosophy
Overnight café
Price increases
Future initiatives
UCLA Medical Center -numbers recap
University of Washington Medical Center
Overview
Patient and employee profile
University of Washington Medical Center
2009 statistics
Harborview Medical Center, Staff Ethnicity
Harborview Medical Center, Patient Ethnicity
Foodservice programs and services
General, renal, heart healthy, and low fiber/soft menus
Room service reduces food and supply costs; limiting overtime reduces labor
costs
Equipment upgrading
Plaza Café: local chefs, expanded offerings
Harborview Medical Center
Foodservice growth trends
Emerging trends
2009-10 foodservice initiatives
Future initiatives
University of Washington Medical Center -numbers recap
Chapter 8: Hospital Foodservice Management
Self-management versus contract management

17. Self-managed hospital foodservice still holds sway
A loyal—and growing—following?
An issue that stirs passion among the faithful
Hospital CEO plays pivotal role
The tighter the budget becomes, the more outsourcing becomes attractive
Cost concerns favor contractors
Outsourcing trend among government institutions?
Bottom line: contracts grow but overall revenue flattens
Table 8-1: Foodservice Contract Management Performance, 2008-2009
Table 8-2: Foodservice Contract Management, Hospitals Contracts, 2008-2009
Table 8-3: Foodservice Contractor Revenue, Hospital & Nursing Home Share, 2007
Aramark Corp
Foodservice operations
Sales analysis
North America Business and Industry Sector
North America Education Sector
North America Health Care Sector
Patient foodservice
Retail foodservice
Facility services
Strategy: partnering in patient care, custom menus, branding
Partnering in patient care
Custom menus
Branding
Table 8-4: Aramark by the Numbers
Sodexo Inc
Corporate Foodservice

18. Education Foodservice
North American Health Care
North American Health Care Foodservice
Patient dining services
Visitor & staff dining services
Retail foodservice
Health care foodservice strategy: high-value custom offerings, nutrition services
High-value custom offerings
Nutrition Services
Market trends & Sodexo response
Health care expenditures
Patient consumerism
Shortage of health care personnel
Table 8-5: Sodexo by the Numbers
Compass Group PLC
Compass Group North America (CGNA)
Sales analysis
Foodservice strategy
Room for growth
It Takes You - Eat Local
Leveraging role of single-source provider
Selective acquisitions
North America Health Care Sector
Patient Foodservice
Senior Living Foodservice
Retail Foodservice
Support Services

19. Strategy
Personalized Care
Retail Branding
Retail Strategy
Table 8-6: Compass Group by the Numbers
Subsidiaries
Healthcare Services Group, Inc.
Sales analysis
Foodservice strategy
Future growth
Table 8-7: Healthcare Services Group, Inc. by the Numbers
Miniprofiles
AVI Food Systems, Inc
Unidine Corp.
Prince Food Systems, Inc.
Appendix
Works Referenced
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